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Tuesday, January 25, 2011

Confidence index hits 8-month high; state jobs data still weak

And finally, another feel good story! Yes everyone, the economy is slowly, but surely getting better!

By Martin Crutsinger, AP Economics Writer

WASHINGTON — The Consumer Confidence Index rose in January to its highest level in eight months with Americans growing a little more confident about the job market and business conditions.

The Conference Board said Tuesday its Consumer Confidence Index climbed to 60.6 this month, up from 53.3 in December. While that reading was better than economists had expected, confidence is still far from the 90 level that signals a healthy consumer mindset.

The January figure was the highest since May's 62.7. At that time, consumer attitudes were improving as economic growth seemed to be taking off. However, the economy stalled in the summer, and so did confidence.

Confidence has been depressed by unemployment that surged during the country's worst recession since the 1930s and has stayed stubbornly high even though the downturn ended in June 2009. Confidence has not been above 90 since the recession began in December 2007.

In the Conference Board survey, the percentage of people surveyed who felt jobs were hard to get fell slightly to 43.4% from 46% in December. The share who expected to see more jobs six months from now rose to 16% from 14.2%.

While confidence has stayed weak since the recession ended in summer 2009, consumer spending has been picking up. During the 2010 holiday shopping season, sales increased at the fastest rate in six years.

Economists are hoping that consumer confidence will keep improving in 2011 as the economy begins to show greater signs of strength and unemployment declines.

But regional statistics out Tuesday offered showed little improvement in hiring in December.

The unemployment rate rose in 20 states in December from a month earlier and fell in 15 and thee District of Columbia, the Labor Department said. It was unchanged in another 15 states. That's nearly the same as in November, when the rate rose in 21 states, fell in 15 and was the same in 14.

From a year earlier, 31 states and the District of Columbia posted declines in their unemployment rates, 16 states reported increases, and 3 states had no change.

The report is evidence that the job market is barely improving even as the economy grows. Most economists expect hiring to pick up this year, even though the unemployment rate will likely remain high.

Employers in most states didn't add any net new jobs last month. The number of jobs on employer payrolls fell in 35 states in December, the department said. Only 15 states reported gains from a month earlier.

The jobless rate for the nation fell to 9.4% in December from 9.8% in November, but the economy added only 103,000 jobs. Employers added 1.1 million jobs for all of 2010, or about 94,000 a month. The nation still has 7.2 million fewer jobs than it did in December 2007, when the recession began.

But many economists expect the nation will create twice as many jobs this year as it did last year. They note that people who still have jobs are not as worried about losing them as they might have been a year ago, and that people are spending more.

Economists expect that a tax cut which took effect in January — reducing the amount taken out of workers' paychecks to pay for Social Security — will also lead to greater spending in the new year.